Dell 2007 Annual Report Download - page 48

Table of Contents
when it is probable that an asset has been impaired or a liability has been incurred and the amount of loss can be reasonably estimated.
We regularly evaluate current information available to us to determine whether such accruals should be adjusted and whether new
accruals are required. Third parties have in the past and may in the future assert claims or initiate litigation related to exclusive patent,
copyright, and other intellectual property rights to technologies and related standards that are relevant to us. If any infringement or other
intellectual property claim made against us by any third party is successful, or if we fail to develop non-infringing technology or license
the proprietary rights on commercially reasonable terms and conditions, our business, operating results, and financial condition could be
materially and adversely affected.
Recently Issued Accounting Pronouncements
In September 2006, the FASB issued SFAS 157, which defines fair value, provides a framework for measuring fair value, and expands
the disclosures required for assets and liabilities measured at fair value. SFAS 157 applies to existing accounting pronouncements that
require fair value measurements; it does not require any new fair value measurements. SFAS 157 is effective for fiscal years beginning
after November 15, 2007 and is required to be adopted by us beginning in the first quarter of Fiscal 2009. We are currently evaluating the
impact that SFAS 157 may have on our results of operations, financial position, and cash flows, and we do not expect the impact to be
material.
In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities ("SFAS 159"),
which provides companies with an option to report selected financial assets and liabilities at fair value with the changes in fair value
recognized in earnings at each subsequent reporting date. SFAS 159 provides an opportunity to mitigate potential volatility in earnings
caused by measuring related assets and liabilities differently, and it may reduce the need for applying complex hedge accounting
provisions. If elected, SFAS 159 is effective for fiscal years beginning after November 15, 2007, which is our Fiscal 2009. We are
currently evaluating the impact that this statement may have on our results of operations and financial position and have yet to make a
decision on the elective adoption of SFAS 159.
In December 2007, the FASB issued SFAS No. 141(R), Business Combinations ("SFAS 141(R)"). SFAS 141(R) requires that the
acquisition method of accounting be applied to a broader set of business combinations and establishes principles and requirements for
how an acquirer recognizes and measures in its financial statements the identifiable assets acquired, liabilities assumed, any
noncontrolling interest in the acquiree, and the goodwill acquired. SFAS 141(R) also establishes the disclosure requirements to enable the
evaluation of the nature and financial effects of the business combination. SFAS 141(R) is effective for fiscal years beginning after
December 15, 2008 and is required to be adopted by us beginning in the first quarter of Fiscal 2010. We are currently evaluating the
impact that SFAS 141(R) may have on our results of operations, financial position, and cash flows.
In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statements — an amendment of
ARB No. 51 ("SFAS 160"). SFAS 160 requires that the noncontrolling interest in the equity of a subsidiary be accounted for and reported
as equity, provides revised guidance on the treatment of net income and losses attributable to the noncontrolling interest and changes in
ownership interests in a subsidiary, and requires additional disclosures that identify and distinguish between the interests of the
controlling and noncontrolling owners. SFAS 160 also establishes disclosure requirements that clearly identify and distinguish between
the interests of the parent and the interests of the noncontrolling owners. SFAS 160 is effective for fiscal years beginning after
December 15, 2008 and is required to be adopted by us beginning in the first quarter of Fiscal 2010. We do not expect SFAS 160 to have
an impact on our results of operations, financial position, and cash flows.
ITEM 7A — QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Response to this item is included in "Part II — Item 7 — Management's Discussion and Analysis of Financial Condition and Results of
Operations — Market Risk" and is incorporated herein by reference.
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